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Does Salary Matter?

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Does Salary Matter?

by dman25 » Thu Jul 05, 2012 8:42 am
Hi Everyone - Happy 4th of July +1!

Quick question - Does your current salary matter at all when applying to B-School? I see on most of the class profiles that 'salary forgone' is one of the statistics included, but does this matter in the B-school rankings and adcom decisions at all? It's easy to understand that someone who is accepted to Harvard will probably have a better pre-MBA job and therefore higher salary than someone who is accepted and attends (for example) USC Marshall. But does this factor into the adcoms decision at all?

All things being about equal would someone who makes $80K/year have better odds at a top school than someone who makes $60K/year? Or does the adcom think that the $80K/year guy is already doing well and doesn't need B-School?
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by PrepMBA.AlexLeventhal » Thu Jul 05, 2012 8:41 pm
I think adcoms like to see salary to see how you are being paid versus your peer group. It gives them another point of comparison, particularly in some competitive track type positions like investment banking analyst where bonuses are not always equal. It also gives them insight into your progress at a firm, to see how you are regarded, and if they have been raising your salary. So yes, it is an important data point.
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by chairman14 » Thu Jul 05, 2012 11:02 pm
Wow, that's interesting, I wasn't aware of that. So you say someone with higher salary will have better admission chances?
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by Jon@Admissionado » Fri Jul 06, 2012 6:29 am
It matters. Salary being maybe the best indication of what your employer believes you are worth. That's why Top schools also have relatively high salaries of folks coming IN (as well, of course, as those going OUT)
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by dman25 » Fri Jul 06, 2012 10:00 am
Thanks guys, appreciate the info!
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by PrepMBA.AlexLeventhal » Fri Jul 06, 2012 10:05 am
Sure, good luck!
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by hk » Sat Jul 07, 2012 8:05 am
With all due respect, I do not agree with what Jon and Alex mentioned here. In my personal opinion, salary isn't a criteria from a business school admission stand point. The reasons being as follows:

1. If you are an international student adcoms can only compare your salary with peers from your country working in the same profession. It takes a lot of effort to do a PPP evaluation as there are limited tools available to get an absolute evaluation.

2. Comparing salaries cross industries would be a stupid thing to do as an iBanker would definitely be paid more than say a journalist!

3. The probability of two people having exactly the same profile and ONLY differing in salaries is very very low. Hence there are more important criteria to evaluate a person and even when the decision comes down to two people; there are other aspects of the candidate that become a more relevant and significant measure.

Finally you shouldn't worry about your salary while applying to a school, especially because it is something you cannot change!

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by PrepMBA.AlexLeventhal » Sat Jul 07, 2012 8:53 am
HK

I agree that there is nothing you can do about your current salary if you are applying now, and therefore you should not worry.

However, let me address a few of your points. If the schools did not care about salary, they would not ask. Now these adcoms are very sophisticated people and they have a lot of experience with looking at salary and grading scales from various countries. They do exactly what you are suggesting--they look at folks in their peer groups, and that means they look at, for example, management consultants in Spain vs other consultants in Spain.

Nobody is suggesting they compare salaries industry vs industry and discriminate against a journalist vs an I Banker. However, they might indeed compare a pool of journalists, keeping in mind their years of work experience.

And yes you are right that salary is not the only dimension between two candidates, but it is a significant data point. The admissions process is largely all about rating, ranking and comparison. Indeed that is human nature to judge and compare in order to choose.

Alex
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by paulsbodine » Sat Jul 07, 2012 10:36 am
dman25,
Your phrase "all things being equal" is key: assuming that two applicants have basically the same credentials (which is highly unlikely) then the one with the higher salary might be given the nod because the higher salary might be used as a proxy for 'career progression.' In fields like consulting and IB, adcoms will know what salaries are appropriate or exceptional at different career points, so anyone 'lagging behind' salarywise will be duly noted. That said, salary is only one of a wide range of factors that indicate career progress, and adcoms also know that promotions/raises are being frozen at many organizations during economic downturns. It's quite possible for an applicant to have been denied a raise for purely organizational reasons, yet be given extremely high performance evaluations, more responsibility than is typical, and have recommenders willing to sing his/her praises. If you are concerned that your salary is lower than the norm, you should have your recommender address the reasons for this this (if they are not performance related!) in the reco letter.

--Paul Bodine, www.paulsbodine.com, Great Applications for Business School
dman25 wrote:Hi Everyone - Happy 4th of July +1!

Quick question - Does your current salary matter at all when applying to B-School? I see on most of the class profiles that 'salary forgone' is one of the statistics included, but does this matter in the B-school rankings and adcom decisions at all? It's easy to understand that someone who is accepted to Harvard will probably have a better pre-MBA job and therefore higher salary than someone who is accepted and attends (for example) USC Marshall. But does this factor into the adcoms decision at all?

All things being about equal would someone who makes $80K/year have better odds at a top school than someone who makes $60K/year? Or does the adcom think that the $80K/year guy is already doing well and doesn't need B-School?
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by kohsamed » Thu Jul 12, 2012 3:45 am
Do you guys post your basic salary only, or include bonus as well?

I work in finance, and get a bonus of 100%+, so feel like i really should include it in order to demonstrate my income
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by PrepMBA.AlexLeventhal » Thu Jul 12, 2012 8:10 am
There are spots on the application form to report bonus as well. Alex
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by kohsamed » Thu Jul 12, 2012 9:00 am
Gotcha, thanks.

As I already earn more than the typical post-MBA income for the schools, I was hoping it would be a helpful attribute to my applications
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by Jon@Admissionado » Fri Jul 13, 2012 4:33 am
kohsamed wrote:Gotcha, thanks.

As I already earn more than the typical post-MBA income for the schools
Oh! Lucky you!
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by kohsamed » Fri Jul 13, 2012 8:57 am
Jon@Admissionado wrote:
kohsamed wrote:Gotcha, thanks.

As I already earn more than the typical post-MBA income for the schools
Oh! Lucky you!
lol I wasn't bragging, i think that would go for most people who move from IB to MBA
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by youngjames » Sat Jul 14, 2012 5:38 am
in my time on the adcom, we never looked at salary as a key criteria. to us it was more used for reporting/statistical purposes.
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